Confidence high in WHSmith performance

Analysts were pleased by a better than expected third quarter performance from WHSmith, despite a 4% fall in group like-for-likes.

Total group sales fell 1% in the 18 weeks to July 2. At the travel arm like-for-likes fell 2% while total sales were up 2%.

On the high street like-for-likes slumped 4% and sales declined 3% in total.

Oriel analyst Jonathan Pritchard said high street sales beat forecasts, in part thanks to the royal wedding, while the travel arm benefited from weak comparables last year when sales suffered in the wake of the volcanic ash cloud.

WHSmith said it was pleased with the performance of its international business, and it secured a further seven sites in the period bringing the total to 47.

Pritchard said: “Our view is that the pace of store openings will only accelerate from here.”

Investec analyst David Jeary described the group like-for-like figure as “better than expected”.

He said: “We remain buyers of the shares given the company’s cash generation and profit growth potential within travel.”

WHSmith reported its prospects of more gross margin growth and that cost savings have been delivered in line with plan. It also said its balance sheet “remains strong”.

The retailer concluded: “The economic environment remains uncertain and while we continue to be cautious about consumer spending, we remain confident in the outcome for the year.”